Hypothetical business

1. SWOT Analysis
NewtoYou Consignments
Companies must continually evaluate their positions in the business world to remain
successful. One of the most useful tools to accomplish this is the SWOT analysis. This analysis
enables a company to isolate its strengths and build on them, discover its weaknesses and
figure out how they can be overcome, find opportunities in the present business climate, and
turn threats into positive problem-solving actions. Once this information is known, the
company can focus the talents and abilities of its management and marketing personnel.
To conduct my research and complete a SWOT analysis on “New to You Consignments” I
began as a shoe store in Seattle, Washington in 1901. Its founders were two Swedish
immigrants named John W. Nordstrom and Carl Wallin. This lucky partnership was formed
after John Nordstrom invested $13,000 he had made in the Alaska gold rush in a shoe store
along with his friend Carl Wallin, whom he met in Alaska. Mr. Wallin was a shoemaker by trade
so he had the manufacturing expertise to go with Mr. Nordstrom's money in setting up the
business. Nordstrom is now one of the largest independent fashion specialty retailers in the
U.S. Twenty percent of the company stock is owned by the founding Nordstrom family.
Strengths:
 Havinga comfortable and
invitingenvironment.
 Friendlyandhelpful employees.
 We treatour customers&
clientswiththe upmostrespect.
 We handle ourclient’sitems
withcomplete care.
 Conducta verydetailedand
understandableconsignment
process.
 We acceptqualityproductsthat
appeal toall differenttypesof
people,styles,andsizes.
 Have a DistinctCompetency.
Weaknesses:
 Since we have more than 1,000
consigners,ouritemscanrarely
be miscountedfor.
 Tags and itemsgetmisplaced
and we are unable tolocate a
consignersitemstoreturnto
themafter90 days.

2. Strengths:
`Nordstrom has an abundance of strengths. The store combines two completely different
target segments within a single business. The namesake Nordstrom stores focus on high end
luxury shoppers. The Nordstrom Rack discount stores provide quality clothing at affordable
prices. Nordstrom is seen as providing a good product for all its customers and that causes
customers to be loyal repeat buyers.
Nordstrom differentiates itself from other similar stores by establishing itself as the upscale
fashion merchandiser with unmatched customer service. So while other stores offer similar
clothing for less money, you can't get the Nordstrom service elsewhere. Nordstrom guarantees
high quality customer service at every visit to the store. A special bond with the customer is
built based on this consistency.
Each Nordstrom store is attentive to the community in which it is located. The individual
stores donate time and money to specific community causes. There is also a commitment to
sustainable environmental practices, human rights, and community support.
The presence of the founding family ensures long term stability and no cuts in service or
quality for short term gains. The Nordstrom brothers now running the company are young and
Opportunities:
 The relationshipwe have withouremployees,clients,andcustomershelpbring
inmore business.
 The employeesare learninghow totreatpeople withrespect,how tohandle
difficultsituations,andbecome more disciplinedandprofessional.
Threats:
 Rivals
 Bargainingpowersof buyersandsuppliers
 Bad reviewsandunsatisfiedcustomers.
 Shoplifters.
 Notreachingour clientsstandardsandlosingtheirbusiness.
 Customersorclientsnotbeingsatisfied whenconsigningwithusorjustshopping
at our store.
Along

3. will likely be there for the next twenty years. They care about the long term success of the
company and this stability is an advantage over competitors.
Nordstrom has a unique way of showcasing its merchandise. Clothing is not grouped by
brand like in other stores. Instead the clothing is categorized into lifestyle sections. For
example, the "Individualist" section offers mispriced contemporary clothing from Theory to
Trina Turk. The "Narrative" section features less costly but classic styles such as Lauren by
Ralph Lauren and AK Ann Klein. Shoppers can put outfits together easily within these sections.
Weaknesses:
Nordstrom seems to be a company with few weaknesses. However, there have been
huge capital expenditures in the last few years. This has caused some slipping of Nordstrom
stock shares. Analysts say that the expenditures were for increasing e-commerce capabilities
and that it was a good investment that will generate a good return.
Sales dropped at the flagship stores in 2014. Growth in the company is coming from online
sales instead of the core business. This might mean that the company may need to analyze this
data and see what this means for the long-term health of the company.
Some potential customers may perceive that Nordstrom is too "high-end" and won't explore
the store. Maybe Nordstrom should publicize their price match policy to try to attract those
customers.
Opportunities:
Nordstrom has identified many opportunities for growth and improvement.
Management has a very strong and specific growth plan which they have begun to implement.
This includes continuing to add flagship Nordstrom stores and Nordstrom Rack stores. Many of
these stores will be part of the expansion into the Canadian market. There is an informed and
cautious approach to expansion. The company is using a dual marketing approach where both
kinds of stores will be utilized targeting the specific customers for these stores. There are plans
to double the number of Rack stores by the end of 2016. Company executives state that
customers shop at both the flagship stores and the discount stores and that it would help the
customer if the two types of stores were within walking distance of each other so customers
could easily shop at both stores. Company managers want to keep their baby boomer

4. customers happy and also attract younger customers. The goal is to maintain the focus on
niche of luxury goods at affordable prices.
The acquisition of the flash sale site HauteLook by Nordstrom is an exciting and key strategy
to be relevant to the large millennial generation customer. HauteLook is also being used to
test products to see which ones might be successful at the Rack locations. I remember seeing a
commercial on TV for HauteLook and I wondered if it was a reputable company. Then at the
end of the commercial they said it was a Nordstrom company and I instantly felt assured that it
would be a safe company to order from. It’s good for business to have a good reputation!
Nordstrom plans to continue and expand its extremely successful online presence. Online
sales passed the $1 billion mark in 2012. This huge success is possible due to free shipping and
returns and access to inventory in every store, not just e-commerce locations. Customer
usability is built into the site. They can see items in different colors on a model, can contact a
stylist, and the number of clicks to a product is under three. The clothes offered are even
designated in categories such as "The Boardroom” and "Casual Friday." This is so helpful in
picking appropriate outfits.
There are plans to update technology with merchandise tracking systems to enable better
marketing to target customers.
Threats:
There are significant threats for Nordstrom in the volatile retail world. There are the rivals with
similar products such as Macy's, Dillard's, Saks Fifth Avenue, Bloomingdales, and Niemen
Marcus. There might be some new entrants but the threat from them is low due to new
entrants not being able to get licensing for the exclusive products that Nordstrom carries.
Outlet stores and malls sell off brands that people might buy as substitute products for the
brands that Nordstrom sells. Also there is the possibility of buying straight from a designer
instead of through the store. The bargaining power of buyers is a moderate threat due to
brand image. Buyers are willing to pay the set price for high end products. Nordstrom will
match prices for the convenience of the customer and to stay competitive. The bargaining
power of suppliers is also a moderate threat because there are limited specialty retail stores.
Department stores need to carry certain brands so this gives the suppliers bargaining power for

5. their products to sell at a reasonable price. Last, a store that is as old as Nordstrom might be
perceived as not having pace-setting fashion and these potential customers might be lost.
Nordstrom's competitive strategy to combat these threats is differentiation through superior
customer service, product quality, and continuous improvement. Nordstrom is committed to
keep up with the latest fashion trends, competitive activities, and the latest technological
innovations. Specific examples include free shipping and returns for online products, access to
online and in store inventory, a liberal return policy, price matching, and local buyers who are
able to choose what customers in their location want to buy.
In conclusion, I have to admit I too thought Nordstrom was a store for rich people in big
cities. I would like to go to a Rack store and see what is available. Also knowing that shipping
and returns are free might motivate me to look at their web site. I'mglad I know the history
and important facts about this stellar example of American retail.